TMI Blog1994 (7) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... erent members of the family, the provisions of Gift-tax Act, 1958 were not applicable in this regard. In support of his contention, reliance was placed on the judgment of Hon'ble Gauhati High Court in the case of Ziauddin Ahmed v. CGT [1976] 102 ITR 253 and the judgment of Hon'ble Madras High Court in the case of CGT v. Pappathi Anni [1981] 127 ITR 655. The learned GTO was not satisfied with the explanation furnished and held that the above noted two assets had been transferred by the assessee without any consideration and hence constituted gift. He noted that "on the basis of the information given by the assessee, the value per share comes to Rs. 174". Accordingly he valued 1252 equity shares at Rs. 2,17,848. The learned GTO then proceeded to work out the value of the plot of land measuring 12510 sq.ft. He noted that the immovable property was situated in Patel Colony, near Kasturba Vikas Grah, where fast development had taken place. He noted that it was one of the best area considered to be in Jamnagar and the market value even before 1984 was not less than Rs. 100 per sq.ft. Since the arrangement had been made on 11-2-1985 regarding the passing over of the title over the land, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various members of the family. The learned DR further submitted that reliance placed on the decision of Madras High Court in the case of Pappathi Anni is misplaced because the facts are distinguishable. That was a case where ancestral property was involved and the dispute was between the mother and the son and when the document was entered into, both parties genuinely and bona fidely thought that the son had a right to a half share in the properties left by his father and it was on this that the document was executed and hence it was held that there was no gift liable to gift-tax because the allotment of property to the son was not without consideration. In the case of the assessee, the learned DR submitted, there was no consideration whatsoever and hence the CGT(A) erred in relying upon the aforesaid decision of the Madras High Court. 5. Shri M.P. Sarda, the learned counsel for the assessee submitted that the assessee and his wife were 82 years old. The assessee and his wife have (through their married life of over 65 years) a family including four sons of age ranging between 62 years and 37 years and one daughter and large number of grand children and great grand children. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... family member/members in assets of the family in creation of which there was contribution of combined efforts/fortune. (3) The family arrangement has resulted into confirmation by each family member about the absolute ownership of every family member in respect of his/her respective assets. (4) The family arrangement also reduces in writing the undertaking by all family members that they will not raise any dispute about the disposal of other assets by the appellant and his wife through their will. (5) The appellant and his wife in fact have made their respective wills on 22-5-1985 in continuation of the family arrangement and their is reference to family arrangement in their wills. (6) The family arrangement also include sacrifice by a son of a part of his land to make provision for common passage road for various allottees. (7) The family arrangement is acted upon by all parties. The learned counsel for the assessee submitted that on the above facts, circumstances and material on record it was clear that this was a case of bona fide family arrangement and as such there is no transfer/gift in a bona fide transaction of family arrangement. The G.T.O. erred in charging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rival submissions and perused the facts on record. The Gift-tax Act, 1958 was brought in the statute book in the year 1958 with a specific purpose. While introducing the Finance Bill, 1958, the then Hon'ble Finance Minister explained "the object of imposing gift-tax" said as under : "The idea of a Gift-tax is not new. Many Honourable Members have stressed both in this House and the other House the need for introducing such a measure at an early date. The transfer of properties through gifts to one's near relations or associates is one of the commonest forms of avoidance of not only Estate Duty but also of Income-tax, Wealth-tax and even Expenditure-tax. The only way of effectively checking this practice is to levy a tax on gifts. Such a tax is already being levied in other countries, for example, U.S.A., Canada, Japan and Australia. The Taxation Enquiry Commission also had accepted the Gift-tax as theoretically an attractive proposition." In the context of the intention of the Legislature we proceed to examine the act of transferring the aforesaid two assets by the assessee to his family members. 9. We find that the assets transferred by the assessee were self acquired a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinguishable. In all the judgments relied upon by the assessee's counsel there were real disputes and bona fide family settlements were arrived at so as to resolve such disputes and rival claims by a fair and equitable division. We therefore hold that the reliance placed by the assessee's counsel on the judgments cited supra is of no assistance to the assessee. 12. As regards the contention of the learned counsel for the assessee that even if there is a transfer and too without adequate consideration the value adopted by the GTO is arbitrary and without considering various aspects. We do not find any merit in it. The equity shares have been valued by the GTO as per information provided by the assessee. Similarly, the land has been rightly valued at the rate of Rs. 80 per sq.ft. after taking into consideration the prevalent market rate of the land in the locality i.e., Patel Colony, near Kasturba Vikas Grah, Jamnagar. 13. As regards the contention of the assessee's counsel that whatever the transfer is there is for adequate consideration in the form of mutual admission of independent titles of family members and undertaking to preserve family prestige and honour by not rais ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
